A Beginner’s Guide to Cryptocurrency and Hardware Wallets

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When it comes to learning about cryptocurrency for the first time, many users might feel intimidated to invest in it due to the lack of resources or information for beginners. In the UK, the Financial Conduct Authority describes how cryptoassets include tokens like Bitcoin, Ether, and Litecoin that can be used as methods of payment. They use a secure form of distributed ledger technology (DLT), such as blockchain, but are not issued or governed by a central bank like fiat currencies. As a result, they tend to be considered as high-risk investments by some people. Due to their volatile nature, they can reach incredibly low values as well as impressively high ones.

Investing in cryptocurrency

Most people tend to invest in cryptocurrency because they believe that it offers potential for growth. To approach it from an intelligent angle, it pays off to think like a businessman or woman. An article by Entrepreneur outlines several steps that you should take if you choose to invest in cryptocurrency. When you’re starting out, it helps if you conduct extensive research in that area so that you’re as well informed as possible. Learning how to navigate around the hype, noise, and unreliable sources can help you protect and grow your assets. Also, spreading your risk across different groups of coins will help mitigate any potential losses. Finally, if you’re determined to invest in crypto, you have to be willing to be a risk-taker to an extent. Only investing what you’re prepared to lose will help cushion you against sudden moves in the market.

Trading cryptocurrency online

Similar to traditional foreign exchange platforms, there are specific cryptocurrency trading platforms that can help you make a profit. Understanding when to buy bitcoin and other forms of currency at their lowest and when to sell these digital assets at their highest is dependent on your research and waiting for the right moment. To help you make logical trading decisions FXCM explains how forex robots can help identify optimal trading conditions using criteria such as momentum, order flow, and support and resistance levels. It is vital that you avoid being led by your emotions when it comes to trading volatile assets like cryptocurrency.

Why you need a hardware wallet

Because cryptocurrency is a highly desirable form of digital currency, it is vulnerable to instances of theft and viruses from cybercriminals. To help you protect your assets, investing in a hardware wallet is a smart plan because it is one of the most secure forms of cryptocurrency storage. Because it stores a user’s private keys within the device, it is more secure against hackers compared to paper wallets. If you’re in the market for a new wallet, our review on the BitBox02 explores its various benefits including an OLED display to visualise transactions, as well as a minimalist and user-friendly design. In addition, it resembles a USB stick, making it less conspicuous to outsiders. More importantly, it also features a FIDO compliant second-factor authenticator, along with an optional passphrase feature.

With the proposed launch of new forms of cryptocurrency like Facebook’s Libra, today’s technological climate is showing that even large tech companies are recognising the value of crypto as well as decentralised methods of digital currency. While time will tell on how the volatility of crypto will be affected in the long-run, doing your research and following best practises will help you feel a little more confident when dealing with cryptocurrency.

Image Credit: Unsplash – No changes were made to the image

Posted by on May 12, 2020 in Bitcoin, Crypto, Hardware wallets
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